Approve the $1 Trillion Pay Package to Sustain Premium TSLA Valuation

3 months ago

Parkev Tatevosian, CFA

"Do I think Tesla shareholders should approve this pay package? I think yes. And I'm going to disclose my reasons why. I own a put option on Tesla stock, so I would benefit if Tesla's stock price lowers, yet I'm recommending approval because if shareholders do not approve this pay package, Tesla's stock price would go down. The only reason why Tesla stock is trading at this super premium valuation is Elon Musk's ability to market to investors, convincing them that the company will achieve massive revenue even when current fundamentals are weak. Shareholders are in a position where they almost have to approve this pay package if they want Tesla stock to trade at these super expensive valuations."

The speaker advises Tesla shareholders to approve Elon Musk's $1 trillion pay package as a necessary step to maintain the high, albeit overvalued, market cap driven primarily by Musk's marketing prowess. He highlights that if the package is rejected, the stock could drop to a more justified valuation, stressing the role of Musk in sustaining investor sentiment despite poor underlying fundamentals.

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